Najmul Hoda PhD Thesis Defence Presentation

An Empirical Study on Faith-Based
Microfinance as an Alternative Tool of
Poverty Alleviation
PhD Viva-voce Presentation
Najmul Hoda
Internal Guide : Prof. Dr. S.L.Gupta
External Guide : Prof. Dr. Viqar A. Baig
PhD. Viva-voce : N.Hoda, November 24, 2015
Department of Management
Birla Institute of Technology Mesra
1

The Patna Parish
Thrift and Credit
Cooperative
Limited
Gramin Vikas Vigyan Samiti
Al-Khair Cooperative Credit Society
2

Outline
1. Overview
– Problem
– Contributions & Publications
1. Need for Study
2. Theoretical Underpinning
– Review of Literature and the Conceptual Framework
1. Research Methodology
2. Empirical Findings
– Case Studies
– Survey Results – Poverty Alleviation and Client
Satisfaction
1. Conclusions & Future directions3

“The poor and the poorest
have a right to be serviced
AFFORDABLY, APPROPRIATELY
AND ACCESSIBLY.”
4

1. Overview
- Problem Statement; Objectives
and Scope
- Contributions & Publications
5

Problem Statement
To understand the functioning of the faith-
based microfinance and to explore its role as
an alternative tool of poverty alleviation.
6

Study Objectives
1. to understand the shortcomings and issues persisting in the
mainstream model of microfinance
2. to understand the concept of faith based microfinance and
develop the theoretical framework of the study.
3. to understand the functioning; standard operating procedures;
and the influence of faith on the faith-based microfinance
institutions.
4. to evaluate the performance of the faith based microfinance
institution in the poverty alleviation with respect to mainstream
microfinance
5. to suggest practical and conceptual suggestions regarding the
suitability of faith-based microfinance
7

Scope of the Study and its Relevance to the
Management Discipline
 Business involving the poor (Prahalad, 2005)
 Requires product innovation
 Huge size of market – 2 billion
 Sustainable management – Operational,
Financial and Social
8

Contributions and Publications
(SSRN/Researchgate/Academia)
1. Hoda, N., and Gupta, S.L. (2015). Faith-based Organizations and
Microfinance: A Literature Review, Asian Social Science. Vol. 11 No.
9, (Scopus Indexed)
2. Hoda, N., and Gupta, S.L. (2015). Client Satisfaction in Faith-based
Microfinance: A Comparison with Mainstream Models of
Microfinance, Journal of Economic Cooperation and Development. Vol.
36 No. 2 (Scopus Indexed)
3. Hoda, N., and Gupta, S.L. (2014). Loan Portfolio of Faith-based
Microfinance Institution: An Empirical Analysis, Post Modern
Openings, Vol 5 No. 1. (Ebsco Indexed)
4. Hoda, N., and Gupta, S L. (2013). Faith Based Model of Microfinance: A
Case Study of Al Khair Cooperative Society. Jharkhand Journal of
Development Studies, Vol. 11 No. 1. Xavier Institute of Social Service,
Ranchi, India
5. Hoda, N. and Gupta, S L. (2010). Faith Based Model of Microfinance: A
Case Study of Al Khair Cooperative Society. International Seminar on
Islamic Finance in India. IRTI, IDB Jeddah. KSA
9

Additional Publications
6. Hoda, N. (2012). Co-operative based Microfinance. Third International
Conference on Institutional and Technological Environment for
Microfinance. Burgundy School of Business, Groupe ESC Dijon
Bourgogne, France
7. Hoda, N. (2012). Co-operatives as the Key to Responsible
Microfinance. Microfinance Focus, an internationally recognized platform for online
knowledge platform about microfinance and sustainable development.
8. Hoda, N. (2009). Critical Issues in Effective Management of an NGO:
A Case Study of Rajasthan Bal Kalyan Samiti. 2nd
International
Conference on Leadership and its Role in Preparing the Organisation
for Unprecendented Change. Institute of Productivity and Management.
Ghaziabad
9. Joshi, S., Hoda, N., and Sharma, M. (2011). Faith Based Model of
Microfinance: An Alternative Tool of Poverty Alleviation. Conference
of Inclusive Growth and Microfinance Access. Banaras Hindu
University. India 10

2. Need for Study
11

Embracing death Microcredit has been the
bane of many a farmer. Many have been
forced to commit suicide.
https://parisar.wordpress.com/2012/03/
Anjumans deprive Muslim
women of microcredit
Swaminathan S Anklesaria
Aiyar, Economic Times
Bureau Nov 8, 2009,
10.17am IST 12

Microfinance Industry
• Approximately 130 million clients (World Bank
2014)
• Outreach – less than 20%
• Growing at a CAGR of 16.61% percent over the
period 2012-2016
• Approximately 3 billion poor
• The highest concentration of microfinance
accounts in the world is in India (188 million
accounts representing 18% of the total national
population)
13

3. Theoretical Underpinnings
14

Literature Review
 Extant researches on mainstream
microfinance institutions
 Conceptual framework of faith-based
organizations, development and
microfinance
15

16

17

Indian Context
19PhD. Viva-voce : N.Hoda, November 24, 2015

Issues in Mainstream
Microfinance
• Supply-side (Funding; Client needs; Sustainability)
• Demand-side (Product differentiation; Awareness of
duties;
• Intermediation-side (Specialized institutions; For profit;
Self-regulating)
• Regulation-side (NGOs/Informal institutions;
Uniformity; Positive environment)
20

Important References
• Adams, D and von Pischke, J. D., 1992. Microenterprise credit programs:
‘deja vu’, World Development 20, 1463-1470
• Armendáriz de Aghion, B. and Morduch, J., 2000, Microfinance Beyond
Group Lending. Economics of Transition, 8: 401–420
• Basargekar, P., 2009. Microcredit and a Macro Leap: An Impact Analysis
of Annapurna Mahila Mandal (AMM) - An Urban Microfinance
Institution in India The IUP Journal of Financial Economics, Vol. VII,
Nos. 3 & 4, pp. 105-120, September & December
• Consultative Group for Assistance of the Poor (CGAP), 2010. Global
Implications of the Crisis in Indian Microfinance, Focus Note 67,
Washington DC
• Deaton, A., 2006. Measuring poverty. In A. Banerjee, R. Benabou, & D.
Mookherjee (Eds.), Understanding poverty (pp. 3–15). Oxford, UK:
Oxford University Press
• Dichter T, and Harper, M. (eds), 2007. What's wrong with microfinance?
Warwickshire: Practical Action Publishing
21

Prize motivation:
"for his analysis of
consumption, poverty,
and welfare”
- Focus on India
The Sveriges Riksbank Prize in Economic Sciences in Memory of
Alfred Nobel 2015
Angus Deaton
22PhD. Viva-voce : N.Hoda, November 24, 2015

Faith-based Organizations
“a faith-based organization is any organization
that derives inspiration and guidance for its
activities from the teachings and principles of
the faith or from a particular interpretation or
school of thought within that faith”
(Clarke and Jennings 2008, p6)
23

Influence of faith on FBOs
• Organizational
Characteristics
1. Mission statement
2. Founding
3. Affiliation
4. Controlling board
5. Senior management
6. Support
7. Personnel religious
practices
• Programme
Characteristics
1. Religious environment
2. Program content
3. Integration of religious
components
4. Expected connection
between religious
content and desired
outcome
24

Faiths and Financial
Transactions
• Principles of lending
• Interest rates
• Wealth accumulation
• Trade
• Charity
25

List of Faith-based MFIs
Name Study Faith affiliation Country/ Head Office
Christian Aid Varndell (2005),
Harper et al. (2007)
Christianity UK/Oxford
Muslim Aid Clarke (2008 ) Islam UK/London
SKDRDP Harper , et al. (2007), Ashta (2011),
Shetty (2009)
Jain India/Mangalore
Hand In Hand M-CRIL (2010) Christianity UK/London India/Tamil
Nadu
Akhuwat Harper , et al. (2007) Islam Pakistan/Lahore
COVA Harper, et al. (2007), Kaur (2007) Islam India/Hyderabad
Al Farz Foundation Khaled (2011) Islam Pakistan/Lahore
CAPARV Harper , et al. (2007) Islam India/Imphal
ESAF Harper , et al. (2007) Christianity India/Chennai
Al Khair Cooperative Credit
Society
Khan (2009) Islam India/Patna
26

27
Catholic Relief Services Harper , et al. (2007) Islam India/Ranchi
The Holy Cross Social Service
Centre
Harper , et al. (2007) Islam India/Hazaribagh
LEAP Harper , et al. (2007) Christianity Liberia/Monrovia
Village Development Project Bradley (2009) Hinduism India/Jodhpur
Oxfam Bradley (2009) Christianity UK/Oxford
Islamic Relief Worldwide Cordier (2009),
Kirmani and Khan (2008)
Islam UK/London
World Jewish Relief (WJR) Kessler and Arkush (2009) Jewism UK/London
Tearfund Wrigley (2011) Christianity UK/Teddington
Muslim Fund Deoband Khan and Nisar (2004) Islam India/Deoband
United Methodist Committee on
Relief
Clarke (2008) Christianity USA/New York
Chinmaya Mission Sidhabari Paul (2012), Paranjape (2005) Hinduism India/Sidhabari
SNDP Minimol and Makesh (2012) Hinduism India/Kerala

4.Research Methodology
28

AIMS-SEEP Framework
 Assessing the Impact of Microenterprise
Services (AIMS) - Small Enterprise Education
and Promotion (SEEP)
1. the changes that occur in clients’ lives, their
enterprises, their families/households, and their
communities;
2. the extent to which the identified changes are
related to clients’ participation in the
microfinance program
 Six Design Strategies 29

Research Methodology
• AIMS-SEEP Framework – Matured Clients only
• Two phased study
Phase 1 - Case Study
Phase 2 - Impact Assessment
30

Phase 1 – Case Study
• Selection of FB-MFIs
• Data gathering -
organization documents,
archival records,
interviews, direct
observations, participant
observation and physical
artifacts
• Data analysis (framework)
31

Phase 2 – Impact Assessment
Poverty Variables
A. Social Impact
1. Self Confidence
2. Social Status
B. Women Empowerment
3. Treatment of others
4. Awareness of rights
C. Economic Impact
5. Household Income
6. Business Income
7. Household Savings
8. Ability to meet emergency
needs
Client Satisfaction
1. Reasonability of interest
rate on loan
2. Loan procedure
3. Loan repayment policy
4. Availability of loan
5. Discrimination in selection
6. Technical Assistance to
clients for business
7. Location of the branch or
point of transaction
8. Staff support 32

Impact Assessment Methodology
• Purposive sampling – 150 from Mainstream and
50 each from the three FB-MFIs – Total 300
• Data Collection – Use of survey questionnaire,
Self-administered and with the help of Daily
Collection Agents
• Comparison of two set of MFIs – t-Test
33

A. Case Studies
34

Institutional Overview
35
As of 2012 GRAVIS ACCSL PTCCSL
Deposit (in Rupees) NA 2.1 Crores 93.83 Lakhs
Loan Outstanding (in
Rupees)
2.13 Crores 1.6 Crores 2.48 Crores
Number of
beneficiaries/members
16790 5221 1149

Influence of Faith on Organization
36
Factors GRAVIS ACCSL PTSCCL
Mission statement X X
Founding
Affiliation
Controlling Board X
Senior Management
Support X X X
Personnel religious
practices:

37
Factors GRAVIS ACCSL PTSCCL
Religious environment
Program content:
Integration of religious
components
X X X
Expected connection
between religious
content and desired
outcome
X
Influence of Faith on Programme

B. Impact Assessment
38

Gender Distribution
39
Gender Mainstream Faith-based
Male 4(2.67%) 52 (35%)
Female 146(97.33%) 97 (65%)
TOTAL 150(100.00%) 149 (100%)

Occupation of respondents
Occupation Mainstream Faith-based
Service 0(0.00%) 21(14%)
Self-employed 150(100%) 119(80%)
Daily wages 0(0.00%) 09(06%)
TOTAL 150(100.00%) 149(100%)
40

Types of self-employment
Type Mainstream Faith-based
Agriculture 7(4.67%) 10(8%)
Small traders 35(23.33%) 60(51%)
Services 21(14.00%) 35(29%)
Manufacturing 87(58.00%) 14(12%)
TOTAL 150(100.00%) 119(100%)
41

Incidence of borrowing from MFI
42

Average Loan amount
43

Repayment period
44

Loan repayment frequency
45

46
Summary of results of hypotheses
testing

47
A. HYPOTHESES RELATED TO IMPACT OF THE PROGRAMME
Variables Hypothesis Remark
HA1:improvement in self-confidence Rejected Beneficiaries of secular microfinance
report greater impact on this variable.
HA2:improvement in status Rejected Beneficiaries of faith based microfinance
HA3:treatment to women Accepted No significant difference found.
HA4: awareness of women’s rights Accepted No significant difference found.
HA5: improvement in monthly income Accepted No significant difference found.
HA6: improvement in business income Accepted No significant difference found.
HA7:improvement in household
savings
Rejected Beneficiaries of secular microfinance
HA8:improvement in ability to meet
emergency needs
Accepted No significant difference found.

48
B. HYPOTHESES RELATED TO CLIENT SATISFACTION
Variables Hypothesis Remark
HB1: reasonability of interest rate Accepted Beneficiaries of secular microfinance
HB2: loan procedure Accepted Beneficiaries of faith based microfinance
HB3: repayment policy Rejected No significant difference found.
HB4: timely availability of loan Rejected No significant difference found.
HB5: discrimination among borrowers Rejected No significant difference found.
HB6: technical assistance for business
improvement
Accepted No significant difference found.
HB7: location of the branch or place of
transaction.
Accepted Beneficiaries of secular microfinance
HB8: staff support Rejected No significant difference found.

6. Conclusions & Future
directions
49

Myths broken
• Also a microfinance model – share the same
principles and products
• No discrimination
• Not for women only
• No one-size-fits-all product
50

Value Addition by FB-MFIs
• Savings facility
• Customized products
• Interest rates
• Over-indebtedness
• Cultural issues
• Grass-root organizations
• Empowerment
• Impact of faith
51

Future directions
• An Appraisal of Financial Sustainability of Faith-based
microfinance institutions;
• Role of faith in the Social Capital Formation by Faith-based
microfinance;
• Mainstreaming Faith-based Microfinance: Performance
Evaluation;
• An Assessment of the Common Virtues of Mainstream and
Faith-based Microfinance and the Value Addition in the Process
of Poverty Alleviation.
• Religious Social Capital as a Substitute of Physical Collateral in
Microfinance.
• Impact Assessment of Faith-based Microfinance institutions
52

Acknowledgements
AcknowledgmentsPhD. Viva-voce : N.Hoda, November 24, 2015
• My Guides – Dr S. L. Gupta and Dr Viqar A. Baig
• Dr Munish Makkad, Director, BIT Noida
• Dr Meenakshi Pradeep, Dr Arun Mittal and all in the
BIT Noida centre
• Smt Shashi Tyagi, Chairman, GRAVIS
• Mr Arshad Ajmal, Founder President, Al-Khair
• Mr Francis Joseph, President, Patna Parish Credit
Cooperative
• All the Daily Collection Agents
d53

?
QuestionsPhD. Viva-voce : N.Hoda, November 24, 2015
54

Najmul Hoda PhD Thesis Defence Presentation

Empfohlen

Empfohlen

Weitere ähnliche Inhalte

Was ist angesagt?

Was ist angesagt? (20)

Andere mochten auch

Andere mochten auch (20)

Ähnlich wie Najmul Hoda PhD Thesis Defence Presentation

Ähnlich wie Najmul Hoda PhD Thesis Defence Presentation (20)

Mehr von Najmul Hoda

Mehr von Najmul Hoda (7)

Kürzlich hochgeladen

Kürzlich hochgeladen (20)

Najmul Hoda PhD Thesis Defence Presentation

Hinweis der Redaktion